Which of the Following Statements Regarding the Application of the Lower

Multiple Choice

Which of the following statements regarding the application of the lower of cost or market method is true?

A) Generally, historical cost is greater than replacement cost.
B) When the lower of cost or market method is used, inventories are valued at their selling price.
C) The lower of cost or market method is most commonly applied on a total inventory basis because it is a more conservative approach.
D) The lower of cost or market method is an exception to the historical cost principle.